Allegiant Travel (ALGT) 30 Jan 192018 Q4 Earnings call transcript

Company Profile

Participants

Chris Allen	IR
Maury Gallagher	Chairman and CEO
John Redmond	President
Scott Sheldon	CFO and COO
Drew Wells	VP, Revenue & Planning
Greg Anderson	SVP, Treasury and Principal Accounting Officer
Scott DeAngelo	CMO
Hunter Keay	Wolfe Research
Helane Becker	Cowen
Savi Syth	Raymond James
Catherine O'Brien	Goldman Sachs
Michael Linenberg	Deutsche Bank
Dan McKenzie	Buckingham Research
Steve O'Hara	Sidoti & Company
Duane Pfennigwerth	Evercore
Rajeev Lalwani	Morgan Stanley

Call transcript

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Operator

Good day, ladies and gentlemen, and welcome to the Fourth Quarter 2018 Allegiant Travel Company Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] As a reminder, today’s conference is being recorded. I would now like to turn the call over to Mr. Relations. Investor Allen, Chris begin. may you Sir,

Chris Allen

Thank you. full fourth and Travel to XXXX earnings Allegiant year Company's call. quarter Welcome

On the of to Redmond, questions. call Company's with Drew of Financial me today are others Operating Chief Planning; Chief Scott our Officer; Officer; and Officer President; handful and Chairman our Maury your Executive and & Company's help John VP answer the Wells, Sheldon, Chief Revenue and Gallagher, the a

view To like to We result of to the today. turn statements, as be feel earnings free assumptions ir.allegiantair.com. that, a I'd The new our The on Company's will and and or Company's the information information it questions. and to We undue available by factors with whether fully at With statements up statements underlying forward-looking statements do not to are events, Investor actual Company of expressed and on more those statements. it SEC. this events reliance are based that to some materialize. release, strategic update the differ of assumptions in based risk well forward-looking us and or performance visit from rebroadcast as this otherwise. statements may place today open then comments our concerning filings others start undertake a commentary Various could forward-looking Any publicly investors future call, our future disclosed Relations contain as cause not results these will forward-looking with any to implied which obligation cautions on our plan. These John. to no materially to forward-looking site risk factors over

John Redmond

XXXX, because had and I the everyone. year. get Day out much, four as and on following But, we more of or you seen to towards the providing Day time of since ones to provided to so through was went Chris, that those participated guidance the interesting working that release get call, who seemed I us conference to help that couldn't XXXX, fleet. which call on, operate as provide Investor Investor was this earnings Thanks Airbus we afternoon, Welcome the guidance to far provide out. the years the significant have one of of to XXXX. our we In and for we we all transition be was reflect the on this information, course year But initiatives as initiatives we which revenue very at the to out which were going come an cost, the were well expected good getting ready end-of-year guidance of that fleet to end guidance

the ones stated. happened amazing delivered difficult we're not yourself, but we of three frankly. what's we delivered we course, schedule early. Of on all year you about at that at that over why now ‘XX. are When as pacing initiatives, done look you transition so a as now, ask completed today years, we two We excited And that in well, timeframe, that very that's and back years look instead suggested going team the all you yet, only of to those haven't or on has on deliver this those initiatives into got

look Company. that history the going of this Allegiant amazing has going more done you guidance, important all one be when during we're in you that at the So, but job ‘XX the proud the point happen of can Airbus forward. couldn't it's here only excited be what's very But, to transition, to getting the entire that timeframe coming been an fleet amazing difficult team I an finally us about a into in

last the understand help and call there's a and this mentioned we you of when out, non-airline provide We year, at the are year, we’d Consistent course lines doing trending to release And We'll understanding followed that's add a color year. not your he costs presentation. And you business operation ‘XX. we as aircraft that fleet that earnings as last we single We there of is. the right So, comment plan little transparency deal on to XX guidance more during continue for give I’ll we guidance, well. on we when airline put it our did aircraft here assist Scott we that XXXX. bit in all this of our the course his as the the move continue grow pilots type. look did will with how a are course, CapEx, in point XXXX of as CASM-X changes let great provide of excess to XXXX throughout we in what into And material to data ‘XX gives size for forward. unless

release federal and I will the non-cash that comments is a data some we in in but this And of made past, that's the in to the as reiterate both that taxpayer One fact be we’ve points on the wanted ‘XX ‘XX. not well.

the talked So, looking operating in to an going fleet fleet completed Allegiant transition, the of we the course fourth all did team said course quarter is time ago. we that some Airbus about as of entire we forward forward. And as I

our been has as as completed years in best we of performance the transition, So, ahead the as are good us. ‘XX

someone course what’s move you forward. true that going heard of happening ain’t nothing as we is here And statement I seen yet. for very say, be to As

and controllable for So, QX of every year we XXXX, in XX.X%. by a factor outperformed on highlighted the of full-year operating completion metric

of transition the and challenges focus incredible distract the not our Allegiant team the and intention of here. did So, complexity

’XX. the I over standing wonderful for wait been amazing. team on and Scott. I a who finish And couldn’t should forward next group note, all be associated proud this I’ll to look employees with that up taking year, it be So, more being boy, as of we year to bow. we and and management have But, can’t the It’s turn

Scott Sheldon

everyone. and afternoon, Thanks, good John,

want members to our of team really the throughout thank network I a all for and partners tremendous XXXX. First,

mission given year. really and was remaining Maury our used acquire of the the the should think, many MD-XXs. the operators, pipeline and I were finishing sun-setting with the at celebrated, that We efforts combined as us tasked XX as induct of from the primarily had to Airbus, be outlined really beginning in results operators. multiple XX which

us season, our sparing reliance we the increased of to summer aircraft. minimize which line on to Sanford We During consolidated operational our MD-XXs all Airbus allowed reliability, base.

to ops many members as our offline exited being trained the flight a Airbus. Our to XX condensing to the did minimize allowed job and get at on us as flight crew footprint, crews as we training November really great that's training particularly

we without say in So, a those all successful doubt, could I areas. we're think of

metrics we In were that addition, -- to achieve. pretty targeted hope operating we we some which aggressive

period reduction been at by these better. just really This look points would exception on a by substantially our XX%. [indiscernible] resulted X.X increased in full-year points ops to over XX%, during have the $XX summer, by controllable you of If with expense basis, AXX a we We XXXX the to X-week X.X X.X percentage numbers a by points million. to XX.X%. completion regular completion increased controllable in percentage, And

which profile, X.X%. We our to CASM-X airline continue pleased for reduced specifically with be the by

there's did everyone done clarity to that mentioned this the a a job out, network. job but couple a little want again, I on a laying guidance. a And throughout on. nice more just to well give once points just and So, John little

per the the full given give can XX.X number. half guiding of really we're basis. the down factor a per which XXXs into fourth be We're we off the So, quarter. Really, first curve, put to surface ASMs on fleet. That's of driving a ASMs year here little gallon, ASMs three earnings to is year the a $X.XX we in the a walk the page release, gallon of paying you $X.XX It's $X.XX appears currently $X.XX about per $X.XX forward we up full gallon, pacing on loaded. our to coming light gallon.

the plan fleet XX XXXs. units in of half Our bias with first has coming

‘XX X.X% simply the expense, This about of $XX we're on one just rate $XX the ‘XX current bond. of a ‘XX. XX, Tax economics we're refinancing Full-year to the basis, effective our XX%. in to ASMs to was guiding full-year profile deduction. XXXX. includes leverage unsecured guiding of was per of It little Section the million million into tax Interest XX a two gallon, fall from from up under specific off rate, impacted is increase issues, the So, in which bit just which by organization. XXX ‘XX reflects is up primarily over a $XX full-year will million

on moving million to we from companies impact addition, 'XX. some In some purpose full-year special million This But, to let on Drew we’ll that. $XXX dissolution million $XXX touch ‘XX. placed Depreciation, ASM the aircraft of in growth our up from related in that is we're guiding, to we have have $XXX for about Europe.

On the the I surface, written impaired effectively fleet to down zero sizable our fourth was XXXX, pretty in quarter that value. increase, MD-XX book think folks of means should it's was remember a but which that

guiding So, expense our had CASM-X. our for all John XX% single down digital of related produced MD-XX X.X which ASM fleet, mentioned to ASMs. We're depreciation on growth. under to about we XXXX, airline our zero of entire X.X down just

to flight the pleased the efficiencies better be crews fleet to we're continue from of particularly pacing items out some just transition, the of getting We related type. that single efficiency and

company-wide effort. full mentioned, XXXX under grew X.X John plan. once just that's the So, a cents again, We ex-fuel.

around into you end $XX by up coming the $XX XXXX. prior in buckets, Full-year broken bit year. about is of the CapEx which A three $XXX $XXX from airline those maintenance in we’re million, little the see million So, It’s CapEx to million. really for of can CapEx. million levels reaching is on

year. a aircraft it's In fairly addition, CapEx healthy

we can you leases them some backfilled As purchases. the in see some and outright release, with finance terminated

this to XX% EPS XXXX midpoint. our last least, the of guidance, really And growth some at $XX.XX but So, up related. then, not is $XX.XX,

look the so, of the the of bring. And health organization, pleased we health And forward Drew? with very what to XXXX will franchise.

Drew Wells

us everyone as Thank up revenue thanks our impact to this number including you, rules, with the benefit joining I'm best breakage credit performance indicated which pleased recognition to fourth in easily of the in to associated year-over-year card October. announce of roughly afternoon. program. That we quarter as ends due includes loyalty million $X XXXX of up also TRASM X.X%, very Scott, and the for year-over-year

XXXX fee we forward, TRASM XXXX as be increased and XXXX going this the beginning was benefit. hit was While their on amount the that of saw Note the what and of fixed at amount January to the and breakage explains which slightly to through The $X a with TRASM considered we should the will everyone in million Without quarter. expected up these release between of in laid that performance EBIT operation we like breakage, variance X-Ked be the X.X%, today's than initiatives was also able flights, higher commend I’d year. range onetime to breakage most take million Day involved for mentioned. Investor for success. We planning in out John $XX.X forecasted the XX.

to turn the increase to in the on X% transition, X%, a our we our levels. EBIT corner XXXX as XXXX, ASM to previous With year unprecedented fleet and our back gets successful initiatives. As fleet will guidance benefits remaining the we of expect full count reap utilization

drive However, accretive set to well the growth efficient we are year. revenue and through up unit

and purchase crew our dependent continue aircraft of to is been is on destinations further will throughput passenger and not day, for us better has Rapids optimize This strengthens base good peak the to in growth our historically the strategy. demand planned allow to times in time fares. which the of that higher announcement Grand growth. busiest during base This grow Our Mid-Continent

of to benefit more day the on of aircraft, number peak productivity, fleet in We improve late-XXXX will project through of revenue The is started discount. We growth. the growth of will that also The passengers. seats spare fill also talked aircraft the not project to is pricing roundtrip e-commerce upside initiatives days in in peak adding still good is provide is which the This growth reduce week. goal to dependent realize ancillary primarily the October and XQ innings continued The paying in we this empty to instrumental form which helps roundtrips, itineraries XXXX. with convert early project and into results. was way about one engine should

load-driven. into yield-driven of move be likely versus we will second As more the optimization, gains year

We on continue demand the environment forward strong. looks to revenue as bullish be

bundled ancillary continue will aforementioned initiatives self second development initiatives and roll the benefit out the and We of help in half other as under sort the of begin to to such from products year. should

about points, Airbus self for to a reminder, very Easter to to As revenue from fleet help greater an initiatives. a X I about and greater transition am that, it excited only QX, various X.X to benefit With over X to all later modest X.X like the revenue about Q&A. turn to the XXXX but Overall, is negative a I’d our to QX operator the derived in the points. opportunities

Operator

the you. Research. [Operator come you. our from Thank Hunter line instructions] Wolfe Thank of question will Keay And with first

line Your open. is

Hunter Keay

Hi, I’m it’s and Maybe about everybody. what’s of is so push up. the balance Thank associated going minimum that be tender considering we sheet. to anything? you. liquidity change covenants or you this of, offer remind question strength, need $XXX Sheldon. key the that this us, CapEx Hey, curious Can of [ph] mindful may kind for into of on the to or Thanks. ratios Scott, the EBITDA particularly million either recent

Greg Anderson

can I that Maybe Hey, help tackle Hunter. is one. This Greg.

covenant of on that’ll the out yield high the maintenance key come this bond. is covenants, a refi On the there

just So, that -- yesterday. this term happened B we announced and just or loan price allocate we’ll

to So, $XXX that’ll bond. million high replace instrument be yield the

covenants those minimum there adhere And liquidity. So, is going forward, are we’d that to. maintenance the $XXX about million in really there, covenant a

Hunter Keay

the something or EBITDAR adjusted That’s of really EBITDA ratios any only or stuff. name around Okay. like that was

Greg Anderson

debt that’s And Yes. turns to EBITDAR. X

Hunter Keay

turns, debt to EBITDAR. X

would this asset Just But, am curious, then, Thanks. be not this anything for long us airline care came it of maybe And estate has somebody and I to them. us is tell I how institution kind that side, you a residential known name about institutional well-known generically, to of am cool. real bring table? to you you Okay, going somebody can have guys this obviously what help a time the through is describe, might this the experience? that to manager? lot

John Redmond

not creating kind of of game. better I that end we the before, wait said as till we We’ll more just guessing think off information, a QX. we’re at release of

just And that So, be let’s timeframe. completed that we’re it’s that’ll say, with know. comfortable by someone you that

Hunter Keay

you. you, Got Thank John.

Operator

Thank you.

line Our next Becker with Helane question of Cowen. the comes from

open. is Your line

Helane Becker

excited, Oh I excited Sorry. so my was that Hunter to was God! so chocked. I be following I I chocked.

So, that. sorry about

of the have be about couple if be just should that thinking that just a that? One or or would talk a back-half things. stuff. profitability progresses you all loaded, just or that, mention shouldn’t year, of you of front-end I good are non-airline there So, so loaded about I how is, about we the Can losses, the they’re during thinking how understanding

John Redmond

of the we’re a release; beyond Well, I what to full consistent year. any mean, detail not at we’ve going the is end the which day, provided, provide with entire on it’s based

So, relates a when you added. the say Teesnap, of courses year look at lot lot of a that to first being -- course of

profitable the year basically way and breakeven. in added. that is works profitable out the being When course is two you they’re years model at a look So, less in more and Kingsway, of

to the it at you do has lot when look that. Sunseeker FEC, at can with you related of that right. expenses, So, like And and look pre-opening a

end up can't of in negative income, you capitalize, if they the incur being you you you see expenses reflected types will. losses as that certain So, that

end it's number. not significant day, of the at the a So,

want line look if even you're however it, So, you you not quarter, at one particular straight but to want just any mean, I be going material it’s not it, to significant. to off,

Helane Becker

the and then, other say all couple my months, first demand few wondering the seen booking year any for what you maybe? sentiment of government up in weeks shutdown. way is And respect kind of customers you've in the question your with given are saw about we of just next and the kind changes to I'm of a what the if can with

John Redmond

Drew. ahead, Go

Drew Wells

So, demand looks good moving forward.

January is on to kind going tend for expected. we right weeks mentioned were calls, perform as we of of be to kind looking couple XQ bellwether of been the how and has biggest As other first

the I of see very So, with everything shutdown think else. leisure now. And sort didn't any slowdown space or to government is healthy material relation right I

Operator

question next comes Raymond line the Savi from of James. Our with Syth

Your line is open.

Savi Syth

how we think CapEx any in the really Scott, terminating CapEx? briefly. Is you and kind payment side. some on a bit Just that of years, buying think the aircraft I related to or early clarity should of mentioned future aircraft about for little there of

John Redmond

Do to Greg. that, you want take

Greg Anderson

This Sure, yes. Savi, Greg again. hi. is

$XXX airline heavy CapEx, think ‘XX. of year that including other one-third full maybe maintenance in think about aircraft. about to the Of two-thirds million to On remaining the would about that, relates the CapEx And I for relates spare and engines then CapEx.

so, ‘XX. And going acquire seven brand to half we're engines spare dozen, during new

So, that on puts well. as the some CapEx pressure

Savi Syth

if million rate? XXXX. to kind in yet out. run couple is And little $XXX What's part bit more just on engine were the today at we’re The just sense. the missing. follow-up makes what out over talk of about think, then, laid was might I the a I initiatives kind laid was next Can years? about That Okay. what discussion the you I run was that what’s of rate like it that come and probably

John Redmond

breakout, provided really don't have breakout on been any way. of most completed any. of I well a those their have implementation, never But, by We've but or Savi, year

Savi Syth

maybe really execute Is fair left it just portion the Is a that e-commerce assumption? that's on?

John Redmond

So, that of of to-date. biggest has I least kind the amount the e-commerce buckets is think the completed

As going we’ll the effort as there. the big about count benefit to productivity, be we you collect reduce most fleet think and a of spare that's XXXX

think fuel all production, a be that's exercise Airbus. to simply ASM benefit into about going as map from As we you move

So, kind year big we'll see a windfall of well. this as

of there of and credit it’s for right card, the on year million $XX this is next. kind trajectory terms In in

anything specific to pretty Is that want much you us think there I else it. covers through? go

Savi Syth

That’s helpful.

John Redmond

was originally big by Investor most ‘XX, being by end communicated all of Day. achieved the our to opposed back as which on what is this the mean, of there, the ‘XX end I of is takeaway

Savi Syth

it. all Thank I you. appreciate it. right. Got

Operator

Thank you.

line Goldman from the O'Brien next Sachs. of Catherine comes Our with question

line Your is open.

Catherine O'Brien

time. for thanks and the afternoon Good

there we remind are question respect Can through lower Greg. and moving higher see or a CASM any with pieces simply should you CASM quarters capacity should as to for just assume we go that between or quarters Scott us, XXXX, versa? vice So,

Scott Sheldon

Yes.

it’s think the latter. I

you’re going it’s then, to ASM that QX. the the think, And most given it's first in I just pretty through the least see growth year-over-year. quarter, pressure QX, consistent

Catherine O'Brien

can Okay, think Company non-airline to to just us us think great. should we year? the on operating assumptions structure Thanks. guidance income color underlying maybe that And to cost help you about just give some cost this about then,

John Redmond

But.. I'm I'm understand not your I Catherine. fully sure sorry, question.

Catherine O'Brien

I or of trend you So, But, sort to we margin maybe year into operating about that? like us some back however think you guidance can non-airline assumption want income. gave a non-airline you have maybe just just was or this wondering cost year-over-year,

John Redmond

Yes.

I think, kind cents as kind from X.X per impact ASM, X.X anywhere a give it’s little of you year-over-year, look on of to color. non-airline is ‘XX cost, at probably X.X to the full-year at ex-fuel cents which

Catherine O'Brien

Okay, have maybe just that. benefit, thank time. then, quick from one could. baked more revenue in Thanks that I you saw What from any, into XXXX it your improvement you of for great. one really we the XXXX? if impact And the largest do or the guidance system management And in for kind if was

Drew Wells

Yes.

talked here. lot think well talked kind we the of have we largest that spring have both half a be So, is about as impact bit of XXXX holidays, still -- July this in as have. The constitutes and is about the the is to we kind periods. maybe summer, well the I flight of was what upside very which kind which quite Drew periods of of still demand through of lowest October. And There defined excelled almost breaks before, travel are in going similar the of to

expected. is to the yes, upside but in probably biggest of we believe chunk So, ‘XX ‘XX than more out way with I initially the

Catherine O'Brien

you so much. Thank

Operator

comes Matt Thank you. Fallon of with line from Deutsche the Bank. question our And next

open. is line Your

Michael Linenberg

actually It's Hey. lieu Matt. Linenberg Mike of in

that financing terms million Is the in we the $XXX The the terms in we debt, that assumption a you're XXX, of think as the modeling that expense you as that where here. couple marketplace? would that similar about think getting fair currently to for Just for of borrow XXXX? of about be

Greg Anderson

completed fact of the will that of financing that it that collateral it like that non-recourse, come transaction. we But, called when can’t something think, really with some expect -- out I we're all has being just out a full is the plane. level to say Again, you details release be in

John Redmond

is Well, what the well, interest capitalize as Michael... we cost

Michael Linenberg

saying you’re that the cost Oh, okay be capitalized? interest will

John Redmond

Yes.

Michael Linenberg

XXX, looking of that generated then, we’d XXX, the that’s portion come Okay. to that? assume you of out going XXX And remaining also funds, the to or less of internally finance the the

Greg Anderson

internally That would generated be funds.

Michael Linenberg

way to Okay, the Easter in Drew, it points great. And you no the X.X I on impact, but I calling then, just Why March, Easter think second was think X.X -- year. the this realize there? said just mean, spread just else Is out question, quarter. fell? XXst something was April and June last than the there year I I Xst day there the that

Drew Wells

of the kind comp about really looks It’s what like.

April is leisure for So, very our low late customers. demand

So, some spring of needle strong of from more of will it a far the swing reaping out. the Easter are peak still that really benefits will March traffic, the shifting an lot some when of that at and there any than travel breaks shift there, end out is

of lot of the what based it part on a kind looks of it So, non-Easter like. just

Michael Linenberg

makes lot That of sense. Okay.

Okay, great. everyone. thanks Thanks Drew,

Operator

you. Thank

with from of Our next question the McKenzie Buckingham Research. Dan comes line

Your line open. is

Dan McKenzie

an do XXXX your you we you. the and the of outlook. the costs. very of I broken amount Obviously, outlook, it’s inadequate in feel what to are wrong conservatism? With Hi. question could the EPS things you’ve your -- demand to commentary you potentially that outlook? the non-airline back what the are side year full around that which built revenue of guys. revenue heard business, here, should of out strong, key very respect see on Thank What or earlier like revenue just out, for Good are watch afternoon. -- non-airline that drivers go I but the wanted do to I helpful. income kind has kind Thanks, go the of is operating

Greg Anderson

talking You’re non-airline. about the

on add. most that mean, the golf So, a this to we I can’t the projection expect I courses on did imagine anything part. provide of for sideways number we going

of do as the target, revenue So, just the material. would achieve courses be add. to wouldn’t not But, a it number missing expect extent it be again, that we to we

Dan McKenzie

with meant side the I respect clarify of this just to year. to Sorry. business, on the airline

Greg Anderson

Sure.

the So, does course fall the always, look there. but of demand off there’s good, of risk

just us, we’re that past customer in travel. continue downturn, resilient. can It As second see out comes together to XXXX. confident economic down to mean the on seen the can capacity strong price that roll the mean, that. will we relying to do very deployment is when that still in and self the and initiatives still leisure can results. timeline expect. can you’ve as either not point there’s the And at I whether that which we we’re some we the maximize that leisure from customer or incentivize benefit you In put to guess, help that those comes event I very is of oil do piece in down appropriately we adjust risk we generally generally always

back always the that there end. is on So,

have place, our fleet, the to of am confident don’t and the delivery that repeat in of expect in counter some past. pertains very issues the we’ve seen we parties As it I timelines all I to

this a believe it So, is though does don’t that I exist level. always at risk that material some at point,

Dan McKenzie

projections if I here, respect back gave a that us And how with and the could concern. really of you follow-up if focus the just an I more little investor cost then, wonder bit we to Sunseeker. this September. on just might impact last could maybe on question It's kind And focus

include to-date. estimate million that hard last And now, million, not did we're expenses higher $XXX today the seeing expenses close estimate, a but are year. was than think, to $XX presumably some so I

about you're Sunseeker how income guess out that I So, the Sunseeker? there on has guess, Has total sort been percent changed and as of as about we change a how to I or look might, EBIT statement that XXXX? rank development, cost one, might of of anything some the how thinking creep sort

Greg Anderson

No we said were it, number. talking change a Dan. we even I first was all, XXX about going at XXX forward mean, when

of total, chatting as of overall have you're of were But forward. we which to in XX seeing neighborhood spent we have up the time commented the So, change of now everything inclusive been going we’ve the end had we XXX that the to-date, doesn't plus spent of course spent XXX the December, XX.

So, that XXX change, the going overall doesn't XXX forward. nor

Dan McKenzie

last to it's line September the put together Sunseeker that year? how with us that initial contribution forecast thinking back operation, about And the relative for of still overall you're in you in

Greg Anderson

couple going more hoping we're know lot in of but by another see to is a you on. you months, to of the going still -- it a here We're lot site, be if work -- drove

of lot on people going done anything, there's a So, we work say, now. haven't times

committing see we to think going I like vertical. more a before timeframe would what start we when firm to is you start

back start XX we're call opening months couple the going going neighborhood to be so expecting very vertical expectation. of March-April But of the So, be still would or in QX, QX vertical, about from timeframe that then. it timeframe. at that is the early the we end in from And we again, it that time still another no more we��ll months the our

be half the up of in So, call we’d back it this project. looking when XXXX to open is

John Redmond

Yes.

fine, forecast in the all of this that nothing’s capital September, back we On And just clear, being see there. economics changed that we out put expense; just we outlay. the be those is out, none this put is to

So, the was $XX was million item; an item. a not capital it expense

there, for talked changed exceed has So, number we about. been expect many, either? Nothing's don't we've that budget many months that and pretty to firm

Greg Anderson

Yes.

of million. which the time right, north Of was acquisition, component which was a announced just course, $XX long, long ago land we of biggest that

that piece the the So been $XX biggest that spent. was of has

Operator

question next line from Joseph DeNardi our of comes And the with Stifel.

Your line is open.

Unidentified Analyst

Hey, for Joe. actually [ph] guys. on It's Bert

in traffic I'm of for the some is feed wondering just growth United's question probably I think strategy been Drew. decade. this lost the restoring has share earlier

them strategy. in about service again like similar you smaller in do not So, a restoration is been you markets different you high type next be markets think seems and it has Has this reasonable of noticeable planning that year really from guys or will year. capacity grows all? It at pushing impacted of sort American just high or to that’s many way

Drew Wells

results of travel on our half that in still sometimes to requires hours something all. to be at to up non-stop shown that’s this and drive hour two connection us. three on up nothing two and extra can It's traffic All should

big feed a is spoke we in they’re leisure of terms out customer part the that that of spread. versus regional are Largely, then I out. perspective, same business hub think in together. stayed high And from price we’ve that fishing of net pond Additionally where not all into they that the can

So, we not that something felt.

Maury Gallagher

to or of Frankly, to a this say it's an putting schedules. combination Punta of This better own some business, United stealing person not while to going a game. it over But the American I that or their maybe they it's it's and/or the Gorda customer that other. is and on our because place not Not attract customer. sum something stimulation like doesn't about But guy just zero seen a are happen, -- traffic over; airplane reemphasize other really that but to against playing each not we've getting they're want that. Maury. from might like going is

Operator

Sidoti our And the from & Company. Thank Steve with comes line next of you. question O'Hara

open. line is Your

Steve O’Hara

Yes. Hi. Thanks for question. taking my

as share per number I adjusted, operating in earnings guidance and non-airline is assume That's correct? the and on Just income. that the the same GAAP included

Greg Anderson

Yes. correct. That's

Steve O’Hara

you're guess, you them getting benefit you proceeding just can And there expected here that you're than benefit had kind seems there. out. they how of I XXXX were you on significantly mean, where are is clarify you're initiatives, what larger about can that be. just that and comment the some it talking of the Is -- you that? -- laid I Okay. and to saying? most But, about the was like

Greg Anderson

in commentary earlier, And of a the a it throughout to achieved all Drew information, on been those benefits was XXXX. be ‘XX. achieved commenting that provided But, around of benefits have we of will lot was as expected those achieve we them When lot to-date.

So, year. we’re to full as not but through them we're benefit going achieve in move going we the to experience ‘XX, the

done those transition. with So, to some the of fleet relate being

the done of -- pull the so So, that all the those end ‘XX 'XX, benefits. we're forward at fact at in done we're of obviously and not

‘XX. but into trails what with most of done comfortable through not that So, all ‘XX, is if

Steve O’Hara

the and and the XXXX, expect more just with throughout I that fuel into to economy the improve XXXs there. the Okay. year improve All on we gallon XXXs kind in fleet? coming right. should in, the of again then per assuming And mean, ASMs

Drew Wells

Yes.

fair. that's think I

Steve O’Hara

mean, something that XX XX, still of I range? XX about the Okay. number right think to kind in is to

Drew Wells

I XX, But AXXXs. larger is general I of bias direction. that the think, in mean general it’s a

Steve O’Hara

Okay. All right. Thank you

Operator

Thank you. comes question from Duane And our next with line the Pfennigwerth of Evercore.

line is open. Your

Duane Pfennigwerth

afternoon. the XXX? remaining. XXX this on Is Good million $XXX $XXX $XXX clarification that guys. million in it year remaining spend One million to with after Sunseeker Hey,

Greg Anderson

No.

to looking and So, XXX is what finance remaining we’re that have said you XXX. was -- we

less XXX, XXX would we spending XXX. So, be

would that anything that this end excess be announcing spend the quarter. by would of be year in XXX financing the So, would we of we here

Duane Pfennigwerth

or would anything yourself includes Okay. XXX financed remaining But whether spend, you the paid XXXX? in for

Greg Anderson

Yes.

Duane Pfennigwerth

better it are focus be Why reporting of sheet Buster’s a on like might really the on interest secondly to just context gets understand company peaks funded rooms? you and applaud specifically and increased the spending things forward for need do then game any golf But, balance each transparency, by of why these be experiments, capital a interesting little equity Dave course I on And and little. holders? but course, guidance. bit Allegiant quarter, our software in they that you and it

John Redmond

even at is It’s Well, one we where the like synergistic value, it’s right? plus look one three, four. not

golf course instance... people just think of when sometimes for So,

Duane Pfennigwerth

is for I management software Allegiant John, long time. a course have no covered and Allegiant golf between sorry, synergy Travel. There

of airline, higher speak versus have than going you debate how much of the sort next anything just dollar to mean, at the Dave I of the -- the level and you ROIC else you seems to hotel? into can on. be airlines the versus So, debate regarding an a a investment Buster’s Board the next

does debate like? look So, what

Maury Gallagher

going looks Buster’s? I’m play they tell an you to debate what The else go besides do Do they airplane? they on a on Do sits Dave Yes. the airplane, like. Absolutely. Duane, person to sit that what golf? and an

customers, bigger So, we you Duane. want wallet share. information. want more We is gather centric live This information. an era. We information in

putting stuff this scheme our yes, grand an but what so, months years from of airplane can So, now? ROI five you maybe years XX of trying about for four maximum is from going to And this part that the all it an the is articulate argument next now, want and make above they will more more relationships customer is tube focus money have up where centric the and tube. understand customers their rather But, we into more on individual we on do with important centric. a to tube basis than over Filling and an in tremendously. and that spend getting just

spend. business to we’ve as making But than the marginal again days early going a are every we articulate like never best we have mature the those ROI to tried better a as other will. investments can. and that that’s So, investment, And are just

Board the what is Board onboard this. of understanding, the all fully with that’s So, is

John Redmond

because or give But, times courses on deeper emails, of about just of me the thought said, people let don’t of about airline daily for brand we data the a lot it. emails, understand rate a at what don’t it right help people are Duane, So, care to you what Maury point basis. haven’t golf generating generates the now new know one-third instance the

from that actually that of about So, number currently Allegiant’s courses aren’t people it's capturing database. golf emails significant in we're

when the as XXX emails will from expect from the rate another that we airline add at you the the obviously, produces. half we of be throughout courses So, generating year, those rate courses

well given incredible beyond that an what of comments. you point data your that's goes So, thought

Duane Pfennigwerth

how the you has your And and the upgrade initially John. in adventures, the comments. quickly you other I taking getting Board just and appreciate businesses? just multiple lower I those these Congratulations your changed extent I $XX Maury capital than return what multiple, thoughts, But, as wonder, to upon say, you the appreciate reflect to guiding for airline. would the to you're fleet more done I on and multiple deploy anticipated. you ex earnings

Maury Gallagher

as that, short-term certainly problem. think. multiple; conscious and simple it. That's as hit to No we it's win We are a we of long-term, the can say

Operator

And our from next line Lalwani with Morgan the Stanley. comes question Rajeev of

is line open. Your

Rajeev Lalwani

in those competition? Meaning, of attack much you're and markets questions those whatever next or Hi, to similar for XXX years markets possible follow. over a routes the of choose XXX for identified of sort tough about can couple One, keep are just so seeing that being talked without to to guys. seems But what your rounds you. act you competition you guys XX% airline It now? levels growth. those Are

Drew Wells

Of competition those XX% markets closer Yes. now. we actually that it's about identify, right

get percentage the should all we through So, of we of would drop those? that are markets actually competitive,

Rajeev Lalwani

you're And given fleet utilization relates I and versus based then, changes. very flexing around. update just that years an now, oil it prices really on moving to where all as looks the the it's it much, peak different your to the oil fleet love all imagine, how your and the non-peak today on travel other, as work and done ago? that get moving not just transition I'd around, on various does you've impact how network after

Drew Wells

Sure.

process the exact our of same. core the So, is

an forecast flights for that that out gross you as existed market ensuring we that the order to MD an incremental exceeding Airbus. on for is roundtrip level it As sales have out, out to it. put we're in threshold need we six nine a want profit just all exists the months basis for That to

per a difference Airbus potential, earnings MD of between and and the about earnings to $X there's gallon of terms margin. the In same secure the

of flexibility there. to So, kind go that's we the have

actually higher using receive. always we than what to expect we're forward, plan oils we As

everything months to in the have the that. such for able that subject we're internal But up. capitalize have not thresholds we to bit we ability is planning fuel of set the on be that and to in buffer variations add to out a closer capacity maybe you're does to about, growth again, a hitting account X, arise, little X So, to already talking there that

Rajeev Lalwani

I positive, there, of Is that does that one just sneak $XX that non-airline John? in to next that a the If income, turn could in for go operating last million. does thoughts start When away? the on couple years, preliminary

John Redmond

get the definitely even. When course of it closer open to get that to Sunseeker, starts of half get back you break to to as Really, ‘XX, you direction. start you into

You scale more at game. look and at Teesnap, FECs look it's you of a

extremely you you to really ‘XX, numbers all to when -- So, mean, I the look at starts start look positive.

and of So, transition the get negative a the you kind to better. is to in the carry it fleet, where scale move you ‘XX XXXX just course ‘XX, like year, but of of to not it into lot with to transition that a order out look allows get call need starts

Rajeev Lalwani

Thank you.

Operator

Instructions] our a you. from next McKenzie Buckingham Dan question Thank [Operator Research. with question And follow-up is

line is open. Dan now open. McKenzie, Your is line your

Dan McKenzie

items attendants you've transition. of all where is obviously think kind that Thank understand where pilots need fleet -- that can ‘XX? us us you X.X%, to XXXX? non-fuel this to you I of lay maybe flight top -- kind Is already simply you line a the cost, could for inefficiency there the it I X.X% to greatest out go don't the hire need kind and was you. of the are the guys where If can So, back just remind in just good hired If you just those for year? help three

Scott Sheldon

it you’re you're cycle XX-day a carrying lot you’re Yes, Airbus, down XX for as transition excess. put Yes. definitely was it is -- into Scott. to of fully particularly as a crews, carrying to flying And really Dan, draws XXXX, people this you're an you're that. just MD-XXs, it and staffed then you

pace. in a We’ll good I be X XX% maybe pay. to drive ‘XX that think from definitely higher locker XXXX, so a our help. productivity little around We was X have taking ‘XX will points up will utilization to really guy, we'll to bit definitely think

transition. color asset because positive impact a and We DNA, see on. guy up more continue which down, we're that. see month expensive towards And of an this [ph] aircraft lot and win historically, the we on for type real that's the in then movement write aircraft. partly per if aircraft targeting maintenance everything highlighted think to We movement as but would definitely We the $XX,XXX bad just maybe The and introduced of [ph] we that you’re of repairs. is try base for importantly profile, and to is us use a be give as -- part to guide continuing a per the

it's of pretty So I base are straightforward ‘XX financial guys ‘XX. a where and the into think statement, the and from good

Dan McKenzie

and credit we if And appeal the Maury, Very on I the I guess in just an that you card information referenced follow-up of the today. world good. live then, Yes. earlier can I’m question. wondering

directly like in years as respect card Allegiant, third-party years, with can has so, card contribute with contribution just spend, we three to so to And of about think revenue, respect perhaps credit it how as about speak? the that it to might kind five the of just spend more to revenue, look what think kind you credit

Maury Gallagher

will DeAngelo Scott answer that.

Scott DeAngelo

You bet. Happy that. to color on add

million baseball. but we’ve least the build beyond $XX of to reiterate today, we will what it. other already to Drew earlier, partnerships of areas be Above about league end EBITDA credit by So, contributing and began card with again we leverage and minor to that, at XXXX, color business. in program, the existing said as Couple on that think to know

the starting We’re season.

did card. just see to teams You’ll in some shy of if to in the XX largest million, of differences a exposing be perspective, million put XX,XXX XX.X fans of that stadium the their you think get like Allegiant XX.X And flights, ability quickly that just XXXX. appreciating an to airplane, what Allegiant the would

example we’re of one that’s the exposure So, scaling how just of it.

light If ways existing card. the family you very to the sponsorship or credit or become entertainment they centers, deals, partnership see distribute take golf courses rather them, other assets, asset

to posted So, growth see that. we’re on you that begin exposing least to expect point from But, success an continued rate at we’ll of view, then great the exposure card see tripling, can who doubling, we’ll of to from keep and the be that. quadrupling

Dan McKenzie

see. I

for the time, Thanks Okay. guys.

Operator

we Raymond a question follow-up of line Savi have with the Syth And James. from you. Thank

Your line is open.

Savi Syth

Hi.

you Teesnap. Just kind while question of of get the and these pan what’s is -- mix that one of like is say long, of maybe mature, to on X in business standpoint? the airline you case profit maybe a kind various those kind question of on kind mix And more businesses kind FEC a think between let’s size the say base businesses little bit in of kind the once to scale? some interesting versus maybe from these the for these of side non-airline assumption of the What’s out, it you

John Redmond

out. to questions the are profitable you out. When in I two next that start some with I that will, a response course And courses Teesnap, think you three the mentioned a and year starts of the that in of most one adding years is if install mature Really I’ll the potential life, look years at year. the the you to and when earnings the in -- year, look at XXX earlier

the would have cash at a positive So, first going flow fact cash right But, of won’t a to the it mature courses have number we at the year the away. business, XXXX are courses if to within those they end positive be that of a in flow years. or of be end of were lot second XXXX, year,

So, always be why into right? cash The you are that’s you’re you of more, to some have, the start open that challenge masking flow scale as and that positive up preopening running earnings, cash little expenses to a cash up you So, you story. of just you to their where like positive am to be say or going to for get scale. I’d a say, And it takes can FECs, number type bit opened just existence. in courses of out cash a story. of the would we pushed a third scenario, be it you would get move or flow open positive -- the breakeven year year to The is if ‘XX with ‘XX say, you why of into flow second one a positive into you That’s be as three those start I day. meaningful get I start of four instance, flow

be why pointing cash into It's ‘XX a and it's to start they're drag. That's like when to of years we're a not story. meaningful it's back So, the great out. ‘XX these end not and

Savi Syth

from how can profitability be the a these airline side? mix then, like businesses to standpoint, relative And big Okay.

John Redmond

this can It's big all to how actually they as at a get. guessing stage game

Maury Gallagher

airline The to dominate is future. the the foreseeable project going for

So, change, expect don't that's to Savi. --

this on a this we this don't at going be record. point, at go to So, want that percentage to or just juncture. percentage It’s

Operator

concludes question-and-answer Gallagher back the like remarks. I not turn to would And closing this call session. for to Maury today's

Maury Gallagher

much. very you Thank

Operator

today's conference. and Ladies for thank This participating the gentlemen, concludes in you program.

great Everyone disconnect. all day. may have a You

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